Iowa · Iowa Code §543B.6AIowa wholesaling law: the broker requirement, the disclosures and the penalty

Since 2024, Iowa regulates wholesaling of residential property – real property with one to four dwelling units. A wholesaler is a licensee, or a person represented by a licensee, who holds an equitable interest but not legal title in a residential property in order to sell that interest; wholesaling is entering into an assignable contract with an owner to market and sell the equitable interest to someone else (Iowa Code §543B.6A(1)). Anyone wholesaling must be a licensed real estate broker or be represented by one (§543B.6A(2)). Before executing a contract to buy or to convey the equitable interest, the wholesaler must disclose in writing to all parties their legal identities and an explanation of the wholesaling process – including that the wholesaler holds an equitable interest and may not be able to convey title – and give all parties a copy of an executed agency agreement (§543B.6A(3)(a)–(b)). If the wholesaler doesn't make the written disclosures, the seller or the buyer may cancel the contract at any time before closing without penalty and may keep any earnest money the wholesaler paid, notwithstanding the contract (§543B.6A(3)(c)). Wholesaling in violation of the section carries a civil penalty of up to the greater of $10,000 or 10% of the sale price of each property (§543B.6A(4)).